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It’s been a little over a month since the EEOC introduced new guidelines on the use of criminal records for employers and so far the general reaction we are hearing from the marketplace is confusion.  Some examples:

Do I need to remove the question that asks if the applicant has been convicted of a crime?

What is an individual assessment?

What kind of …

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We have received information through Jackson Lewis attorney, Garen Dodge that Elizabeth Grossman, the lead trial attorney in the New York office of the EEOC recently spoke about the agency’s new guidance on criminal background checks and said that the question on the application—”have you been convicted . . .”—even with all the non disqualifying language is going to be viewed by the agency as a red flag.

Garen mentioned that “the term “Banning the box” is the EEOC’s “best practice” buried in the guidance and not even called a best practice in the recommendations section of the guidance.  Here the NY EEOC has announced that “have you been convicted…” language on an application will be a “red flag” triggering further EEOC inquiry.  Not even state and local legislation on “banning the box” has gone this far.  Employers are asking if they have to delete this question from their applications”.

And unfortunately, we don’t have the answer.  We know that neither a mandate nor best practice recommendation were included in the guidance, so it looks as if  the New York EEO intends to enforce something that shouldn’t be enforced. This is very troubling for employers that are doing their best to comply with the guidance as written.

You would hope that would temper their plans and that employers could disregard, but as we all know, even if you win in court it can cost you a lot of time and money to defend yourself.

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In an interesting twist, late last week the Consumer Financial Protection Bureau (CFPB) announced the selection of former EEOC Commissioner Stuart Ishimaru to head a newly formed department, the Office of Minority and Women Inclusion (OMWI). The newly formed office is required by the Dodd-Frank Act to develop standards to promote diversity at both the CFPB and the entities it regulates. The specific charge of the office, by statute, is to develop standards for:
•    Equal employment opportunity and the racial, ethnic and gender diversity of the workforce and senior management of the agency;
•    Increased participation of minority-owned and women-owned businesses in the CFPB’s programs and contracts; and
•    Assessing the diversity policies and practices of the CFPB’s regulated entities.

Ishimaru’s appointment is of interest to many of us who have been tracking the EEOC’s recent actions to quickly pass several new and somewhat controversial initiatives.  It’s likely that the EEOC was acting quickly to bring those initiatives to a vote prior to Ishimaru’s departure, at a time when a 3-2 favorable vote would be most likely.  The most recent meeting held April 25 included passage of new guidance on the use of criminal history in employment decisions by a 4-1 margin, but was passed without hearing, prior public disclosure or comment period, unleashing strong criticism from the Wall Street Journal and the US Chamber of Commerce among others.

Ishimaru’s prior stints include serving in senior positions in the Civil Rights Division at the Department of Justice, and the Commission on Civil Rights. President George W. Bush nominated Mr. Ishimaru to the EEOC in 2003. President Barack Obama named Mr. Ishimaru Acting Chairman of the Commission in January 2009 – a role he held until April 2010. A press release was issued April 30th, 2012, announcing Ishimaru’s appointment.

If you are one of the many entities under the supervision and/or enforcement authority of the CFPB, get ready for a new era of oversight—not only with the mechanics and supervision of consumer transactions, but also in assessing diversity policies and practices. While the full scope of Ishimaru’s new post is not clear, we do know that the Bureau has very broad rulemaking and enforcement authority, and we are standing by for more specifics on Ishimaru’s plan and priorities going forward. If the past is any indication, we will see an aggressive agenda from this new office.

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Now that we have had a chance to pour over all 52 pages including every end note and reference, we have compiled the ultimate summary of the new EEOC guidance on the use of criminal history in a nutshell, along with our own take on what it all means. In this instance, a nutshell turned out to be three pages long. It is not exhaustive, reasonable people can (and will) debate the interpretation of what it all means, and this is certainly not legal advice. But here it is, and we welcome your continued comments and questions. For those of you who missed the webinar we held last week on this topic you can download it here.

Introduction
The EEOC has long maintained that the use of credit and criminal history in hiring can lead to “disparate impact” discrimination.  Disparate impact claims rely on statistical information to prove that use of criminal history and credit information has an unintended discriminatory effect on a protected class—in this case, African Americans and Hispanics. New criminal history guidance, published April 25, 2012, supports the Commission’s commitment to put an end to systemic discrimination and its E-RACE initiative, Eradicating Racism and Colorism in Employment.  In the past year, the EEOC has filed a record number of class action lawsuits alleging that employer’s use of criminal history information amounts to discrimination, and Pepsi recently paid a very well publicized $3.13 million to settle a class action suit brought by the EEOC.
Technically speaking, the EEOC guidance is not binding on courts and carries no “official” legal weight. The EEOC does not have the authority to create statutes or issue non-procedural regulations under Title VII, unlike Congress.  In addition, because the EEOC did not allow for public comment prior to publication of the current guidance, it may be vulnerable to challenges in court.  In practice, however, courts rely heavily on agency policy statements and the EEOC guidance in particular.  Failure to heed the guidance may land you in Federal Court defending a class action claim. What follows is a summary of the Guidance, best practices, and some practical considerations for going forward.

The New Guidance
The new guidance supersedes the old policy statements issued by the EEOC in 1987 and 1990 on conviction and arrest records.  Job relatedness and business necessity remain the legal standard for an employer’s defense. The two times when this standard is met are defined:
1.    Validation Studies: “The employer validates the criminal conduct exclusion for the position in question in light of the Uniform Guidelines on Employee Selection Procedures”;
OR
2.    Targeted Screening with Individualized Assessments: “The employer develops a targeted screen considering at least the nature of the crime, the time elapsed, the nature of the job (the
Green factors). The employer’s policy then provides an opportunity for an individualized assessment for those people identified by the screen, to determine if the policy as applied is job related and consistent with business necessity.”
•    The nature and gravity of the offense or offenses;
•    The time that has passed since the conviction and/or completion of the sentence; and
•    The nature of the job held or sought
•    Individualized Assessment
Since validation studies are extremely difficult and expensive and the social science to support them is not well-evolved, the Guidance concedes that a targeted screening is the more likely option for the vast majority of employers who rely on a criminal background check.

Invidualized Assessment
As explained in the Guidance:  “Individualized assessment generally means that an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity.”
“The individual’s showing may include information that he was not correctly identified in the criminal record, or that the record is otherwise inaccurate.”
Factors to consider for Individualized Assessment:
1.    Facts or circumstances surrounding the offense or conduct
2.    The number of offenses for which the individual was convicted
3.    Older age at the time of conviction, or release from prison
4.    Evidence that the individual performed the same type of work post-conviction, with the same or a different employer, with no known incidents of criminal conduct
5.    The length and consistency of employment history before and after the offense or conduct
6.    Rehabilitation efforts (e.g., education/training)
7.    Employment or character references and any other information regarding fitness for the particular position
8.    Whether the individual is bonded under a federal, state, or local bonding program

Best Practices identified in the Guidance:
•    Do not ask for criminal information on applications. Inquiries about convictions, if made, should be narrowly tailored and limited only to those that are job-related.
•    Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
•    The policy should identify essential job requirements and the actual circumstances under which the jobs are performed.
•    The policy should also determine the specific offenses that may demonstrate unfitness for performing such jobs, and the duration of exclusions for criminal conduct.
•    Record the justification for the policy, procedures, and exclusions, including a record of consultations and research considered in crafting the policy and procedures.
•    Train managers, hiring officials, and decision makers on how to implement the policy and procedures consistent with Title VII.

Practical Implications for Employers
•    Eliminate policies that exclude applicants with any criminal record.
•    Review your paper job applications and pre-hire documents.  If you are using an ATS or web based applicant entry system, consider removing any inquires about criminal history from the application.
•    Limit inquiries about criminal convictions to those which are job related.
•    While individual assessment is not required by Title VII, the guidance implies that without it, you will have a more difficult defense. No examples are given of a scenario where an employer is successful without individualized assessment.
•    If an individual does not respond to an employer’s request for additional information, the employer can make a final decision without the additional information.  How long or under what circumstances an employer must wait is not clear.
•    If you use a third party CRA to conduct criminal screenings, review your packages and their reporting policies to ensure compliance.
•    If you use a third party CRA to adjudicate criminal results, consider building in a review process to comply with the individualized assessment recommendations.
•    Consider FCRA adverse action procedures and ways to incorporate the request for additional information needed for individualized assessments.
•    Note that simply having a reputation for discouraging applicants based on race may invite investigation by the EEOC.
•    Large applicant pools have greater potential for disparate impact, so big employers with high turnover should seek counsel in determining the best means of compliance.
•    Compliance with a Federal law/mandate that conflicts with the Guidance is a defense.
•    State and local mandates are NOT a defense.  They are pre-empted by Title VII if they “purport to require or permit the doing of any act which would be an unlawful employment practice” under Title VII.

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Screenshot of webinar

As you might know, we held a webinar last Friday about the new EEOC guidance on criminal records for employers.  We are now making the recording of the webinar available for download by clicking here.  The description of our session is listed bel0w.

Brace yourself, employers. The EEOC has been busy crafting new guidance that will affect the way you use criminal history in employment. On Wednesday, April 25th, the EEOC voted to approve the new Enforcement Guidance on the use of criminal records in employment, which will go into effect immediately. Changes are here!

Join EmployeeScreenIQ’s Angela Bosworth, JD and Nick Fishman for this special call-in update to review the changes to the guidance and understand what itmeans for you and your organization. Topics covered include: Topics covered include:

  • Comparison of the new guidance to the prior guidance
  • Bright line tests and limitations on number of years reviewed
  • State law issues and mandatory criminal checks
  • Open and pending cases
  • Rehabilitation and recidivism
  • Relevancy of information, job relatedness and best practices

Download the Webinar Recording

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As detailed in our blog post yesterday, we are highly disappointed with the new EEOC guidelines on criminal background checks and the burden they will place on employers going forward.  The outcome leaves employers with vague direction and no real road-map for compliance, while limiting their ability to protect their employees, their customers and their businesses.  If anything, it just exposes them to further litigation from the EEOC and private litigants.

I think EEOC Commissioner Constance Barker captured the essence of our grievances with the EEOC’s actions in her dissenting opinion which included the following:  “My concern for this Commission is how this Guidance will be received by the courts.  To the extent that we have re-written Title VII, the courts will NOT give it deference.  That saddens me because this Commission does not need to be embarrassed again by the courts.”

Check out this excerpt from her response to the new guidelines. This is well-worth the read.

Constance Barker

Comments to the Commission

April 25, 2012

Proposed New Guidance:  CRIMINAL BACKGROUND CHECKS

I object to – and will vote against – the proposed new Guidance on Criminal Background Checks for 4 fundamental reasons:

First and foremost – I object to the utter and blatant lack of  transparency in the approval process.  The proposed revision before us today represents a major shift in the advice we have given the American public for the last 22 years.  Yet, we are about to approve this dramatic shift in our interpretation of the rights of job applicants and the obligations of America’s businesses under Title VII without ever circulating it to the American public for review and discussion. There is absolutely no justification for totally excluding the American people from this process or for this blatant failure to be transparent in how we conduct our business. I am devoted to the issue of civil rights and to the work of this Commission, but if we vote to approve this Guidance today, how can we expect the American people to have confidence that this agency operates openly  and with full transparency?  We are public servants.  We work for the American people.  What could possibly justify keeping them from knowing what is in this document before we approve it?

This particular proposed new Guidance – which in reality is a kind of regulation -  has tremendous implications for Americans.  It is exactly the type of policy shift that we should share with the American people — ask them to take a look, tell us what they think — have we forgotten anything — have we explained things well or is it confusing — and most importantly — how will this impact you.   But we didn’t do that.  Instead, the document was rapidly brought to a vote without the American people ever having a chance to see what is in it.  That is just plain wrong.

There are people in the Commission Room  today and throughout America who have considerable expertise in the subject the Guidance addresses, yet we are about to give final approval to this draft without ever letting any of these experts or the public at large see a single word that it contains.  And, we are approving it without even bothering to  submit it to OMB for their expert review.

That begs the question — why?  Why don’t we want America to see what’s in this document before we make it final? We should have spent months reviewing and discussing this with the public as we have other regulatory and sub-regulatory documents.  Yes, the Commission did have a meeting on background checks and did hear from stakeholders on the general subject of the pros and cons of conducting criminal background searches but seeking general input is a far cry from sharing what is in the actual proposed revised Guidance.  As soon as a revised Guidance was drafted, the public was shut out.

Here is my second concern:  it is my understanding that the Senate Appropriations Committee, Subcommittee on Commerce, Justice & Science  — the  committee that determines our funding year to year — under the direction of Chairman, Sen. Barbara Mikulski and ranking member, Sen. Kay Bailey Hutchinson, in the Report attached to the Appropriations Bill, specifically addressed their concerns about the haste with which this Commission was proposing to approve changes to the current Criminal Background Checks Guidance and specifically instructed the Commission to (a) engage stakeholders in discussion about the intended changes to the criminal background checks guidance and (b) circulate any proposed changes to the Guidance for public input for at least 6 months before bringing it  before the Commission for a vote.  When the Senate Appropriations Committee - the Committee that controls our funding – attaches to the bill that will determine our funding – specific instructions to hold off taking any action on this revised Guidance until we have circulated a copy to the public for input for at least 6 months — it seems to me we should  take that seriously.  So, why is this even on the agenda today?  Are we seriously going to just ignore this directive from the Senate Committee that decides our funding?

Especially when – and here’s the irony – there is absolutely no need to take action on this today or anytime in the immediate future.   What is the big rush to approve this Guidance?  What would justify ignoring a Senate Appropriations directive and ignoring our obligation to be transparent with the American people? There have been no changes in Title VII  – no new Supreme Court decisions that would compel a single change to our current guidance.  In contrast – our Guidance on the use of arbitration agreements in employment contracts has been out-of-date and a misstatement of the law since the first Supreme Court decision on that subject in 1991.   As far as I know, there’s no effort being made to revise that Guidance.

Thirdly – I object to the guidance because it so obviously exceeds our authority as a regulatory commission.  We are an enforcement agency.  We have the authority to issue, amend or rescind suitable procedural regulations.  We have no authority to make substantive changes in the law by issuing Guidances that go beyond what is contained in the statutes as interpreted by the courts.  Our job is to follow Congressional intent and court interpretation — not make new law.  No matter how well intentioned we may be — no matter how much a change in the law may be warranted — we simply lack the authority to make those changes through the issuance of Guidances.  It is Congress’ job — not ours — to weigh the pros and cons of proposed new legislation and approve or disapprove it.   We are not Congress. We are not part of the legislative branch.  And,  it is the job of  the courts to interpret the laws that Congress passes.  We are not the courts. We are not part of the judicial branch.  Our job is to explain what is already the law — not to expand it.    No matter how much some of us may want Title VII to provide additional protections we cannot use our authority to issue guidances, to create new rights or protections that Title VII does not provide.  If we think Title VII should be expanded, we should make our concerns known to Congress — not take it upon ourselves to do Congress’ job.


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Please note that this post was written by Angela Bosworth

It’s here!  The much anticipated EEOC guidance on the use of criminal records in employment was issued today, setting off a flurry of interpretations, complete with webinar invitations and blog posts. Not to be outdone, here’s our take on the matter.

By way of introduction, the road to new guidance was paved with protest, controversy and political horse-trading.  The EEOC has long maintained that the use of credit and criminal history in hiring can lead to “disparate impact” discrimination.  Disparate impact claims rely on statistical information to prove that use of criminal history and credit information has an unintended discriminatory effect on minorities. Studies that show a higher rate of arrests for blacks and Hispanics are often cited in disparate impact cases based on criminal history. While an increasing number of employers are seeking background checks out of security concerns, at the same time, more and more people are released every year from US prisons and jails. The growing ex-offender population, coupled with the economic climate and high unemployment, creates the perfect storm for disparate impact claims.

New criminal history guidance supports the Commission’s commitment to put an end to systemic discrimination and the push to help ex-cons get back to work.  In the past year, the EEOC has filed a record number of class action lawsuits alleging that employer’s use of credit and criminal history amounts to discrimination against blacks and Hispanics.  Pepsi recently paid a very well publicized 3.13 million dollars to settle a class action suit brought by the EEOC.

The push for new guidance is rumored to have been initiated by Obama-appointee and Chair Jackie Barrien, and was pushed to a vote this month due to the unexpected announcement from Democratic Commissioner Stuart J. Ishimaru that he would not finish his term. When he leaves at the end of April, Democrats lose their majority on the panel, and the chance of issuing this kind of guidance is slim. And because of the backlash the Obama administration has already encountered for recess appointments, the seat will likely remain vacant for the remainder of the year.

So without public comment or review, employers have been handed a new guidance to address using criminal history.  So what exactly is guidance, anyhow, and is it really just guidance?

Yes and no.  Technically speaking, the EEOC guidance is not binding on courts and carries no “official” legal weight. In practice, however, courts rely heavily on agency policy statements and the EEOC guidance in particular.  Employers understand and treat it like de facto legislation—Failure to heed the guidance may land you on the losing end of a class action suit in Federal Court.

The old guidance was issued in 1987 and recommended that before using criminal history information, employers had to take into consideration the following to demonstrate business necessity:

• the nature and gravity of the offense or offenses;

• the time that has passed since the conviction and/or completion of the sentence; and

• the nature of the job held or sought.

1987 EEOC Policy Statement on the Issue of Conviction Records under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. http://www.eeoc.gov/policy/docs/convict1.html

The EEOC also issued a 1990 policy statement on employers’ use of arrest records. Under that policy statement, employers have to consider the following before using arrest records to make an employment decision:

(i) the likelihood that the individual engaged in the conduct arrested for; and

(ii) job relatedness.

1990 EEOC Policy Statement on the Consideration of Arrest Records in Employment Decisions under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e et seq.

http://www.eeoc.gov/policy/docs/arrest_records.html

Blanket exclusions of individuals with criminal records have always been suspect, and the use of arrest records has historically been strongly discouraged.

The new guidance supersedes the old policy statements, but incorporates the guidelines. It is heavy on background information, case studies and examples. It is sprinkled with “best practices” with a healthy dose of footnotes. The major game changer is a new requirement for an employer’s defense: Individualized Assessment.

In summary:

  • Job relatedness and business necessity remain the legal standard for an employer’s defense. Two times when this standard is met are defined:
    • “The employer validates the criminal conduct exclusion for the position in question in light of the Uniform Guidelines on Employee Selection Procedures (if there is data or analysis about criminal conduct as related to subsequent work performance or behaviors); OR”
    • “The employer develops a targeted screen considering at least the nature of the crime, the time elapsed, the nature of the job (the Greene factors). The employer’s policy then provides an opportunity for an individualized assessment for those people identified by the screen, to determine if the policy as applied is job related and consistent with business necessity.”
    • “Although Title VII does not require individualized assessment in all circumstances, the use of a screen that does not include individualized assessment is more likely to violate Title VII.”
    • Compliance with Federal law/mandate that conflicts with Title VII is a defense.
    • State and local laws are pre-empted by Title VII if they “purport to require or permit the doing of any act which would be an unlawful employment practice” under Title VII

Other notables:

  • It’s looong. 52 pages long, to be exact. 26 are guidance, the remainder is endnotes.
  • The difference between arrest and conviction records is discussed at length.
  • No more enforcement language. It is geared solely to employers.
  • No prohibition on open/pending cases. While arrest records are inherently suspect in terms of disparate impact discrimination, on an individual basis consideration of an open/pending arrest is still allowed.
  • Individualized assessment is loosely defined as follows: an employer informs an individual that he may be excluded from a job because of past criminal conduct, provides an opportunity for the individual to demonstrate that the exclusion does not properly apply to him; and considers the individual’s additional information should change the decision (looking to job relatedness and business necessity.

The Individualized Assessment section of the document lists “relevant” evidence that an employer should consider.  This is a MUCH more extensive list than in prior statements.  The list includes facts or circumstances surrounding the offense, the number of convictions, the age at the time of the conviction/release from prison, evidence of no related incidents, rehabilitation, employment or character references, fitness for the position, and bonding.

If the individual does not respond to an employer’s request for additional information, the employer can make the decision without the additional information.  How long or under what circumstances an employer must wait is not clear.

The guidance gives many examples in an attempt to clarify when and what an employer can consider.  We will be providing a more detailed overview of the ways to establish job relatedness and business necessity as we review the Guidance in more detail.

The last portion of the Guidance is Titled “Best Practices”, and it digests the EEOC’s recommendations to employers who plan to use criminal records.  Besides the expected recommendations to train personnel on Title VII, develop policies and procedures, conduct individualized assessments, keep good records and notes, and maintain confidentiality, the Commission recommends that employers limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.  While this is not as specific as a “ban the box” limitation, it does suggest that employers need to review their background screening program to make sure they are asking for defensible information.

The Commission approved the guidance by a vote of 4-1, with Republican Constance Barker providing the lone no vote.

Click here to read EEOC press release

Click her to read the actual guidance

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The EEOC has been busy crafting new guidance that will affect the way you use criminal history in employment. Today the EEOC is expected to vote to approve the new Enforcement Guidance on the use of criminal records in employment, which will go into effect immediately. Changes are coming your way.

Join EmployeeScreenIQ’s Angela Bosworth, JD and Nick Fishman for this special call-in event to review the changes to the guidance and understand what it means for you and your organization.

Register today for this briefing
EEOC on the use of criminal background checks in employment.

Date: Friday April 27th
Time: 2:00 PM – 3:00 PM EST
Register here: https://www1.gotomeeting.com/register/885608496

Topics covered include:
• Comparison of the new guidance to the prior guidance
• Bright line tests and limitations on number of years reviewed
• State law issues and mandatory criminal checks
• Open and pending cases
• Rehabilitation and recidivism
• Relevancy of information, job relatedness and best practices

Download the Whitepaper now!

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It’s official–The Equal Employment Opportunity Commission (EEOC)  will meet on April 25, 2012, http://www.eeoc.gov/eeoc/meetings/next.cfm and is expected to vote and approve new enforcement guidance on the use of criminal background checks in employment.  Credit check guidance, which was initially on the table, has been scrapped—presumably because the proponents could not get the votes needed to ensure passage.  As the Wall St. Journal pointed out, the Commission is rushing to push the vote next week, before the imminent departure of Democratic Commissioner Stuart J. Ishimaru on April 29. Once he leaves, Democrats will lose their majority on the panel, and until he is replaced, future votes are likely to result in a 2-2 gridlock.

We expect the EEOC’s new guidance will substantially modify the existing guidance that has been around since 1987. New guidance will supersede the old guidance, and will take effect immediately upon passage. We anticipate it will contain additional factors for employers to consider when using criminal records, such as the age of the offender at the time of the crime, rehabilitation, timing of the inquiry into criminal history, relevancy of information, and best practices in handling open cases and arrests.  The guidance is intended to assist both employers and those charged with enforcement at the EEOC. But we are concerned that the passage of new guidance without input from employers or the public with muddy the waters and have a net effect of complicating the hiring process. Which is the last thing we need right now, when employers are finally starting to rebound and hiring is finally on the upswing.

Shameless plug for webinar?  Join us for webinar on the 26th, and a special conference call the 27th.

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And the gloves have officially come off.  If the Equal Employment Opportunity Commission (EEOC) thought that they would quietly provide new guidance (i.e. de facto legislation) to employers on criminal background checks and credit reports, the Wall Street Journal just sent the first shot across the bow.

As we have previously mentioned in some recent blogs, the EEOC is scrambling to get this guidance out by the end of the month.  Why the rush?  Check out WSJ’s editorial below.  I imagine that this is just the beginning of the criticism that will come should the EEOC make wholesale changes to the current rules without seeking public comment and by passing these rules without a vote by our elected officials.

The Hiring Police

The Obama Administration’s favorite antidiscrimination tool is “disparate impact,” which relies on statistics to allege racial prejudice, regardless of intent. The Justice Department is using it to lean on banks to lend to more minorities, and now we hear the Equal Employment Opportunity Commission wants to use it to wield more power over business hiring.

Several sources tell us the Commission is working on policy guidance that would significantly limit companies’ use of credit and criminal histories in hiring under Title VII of the 1964 Civil Rights Act. A Commission spokeswoman declined to comment by email, “citing Agency practice barring public discussion of any policy that may or may not be in development.”

No wonder. We’re told that some members of the Commission want to declare that the use of credit checks and criminal histories may have a disparate impact on African Americans and Hispanics. Nothing like the prospect of being branded a racist to force companies to change their hiring practices to suit government’s bidding. Cue the trial bar.

The irony here is thick, given that credit checks were once viewed as a way to undermine the good ol’ boy network and base hiring decisions on facts, not race. Once upon a time, too, there was a distinction between discrimination based on race, which is rightly outlawed, and discrimination based on individual ability and responsibility, which is crucial to making good personnel decisions for colleagues and customers.

A company might use a credit check if a prospective employee would have a job that handles customer monies, for instance. A child-care center might want to know if an applicant has a criminal record. Both help companies make prudent hiring decisions.

The Commission would be overstepping its legal bounds if it proceeds. Under Title VII, the Commission has the ability to “issue, amend or rescind suitable procedural regulations,” not make substantive new rules. Congress expressly permitted the use of credit and criminal histories in hiring decisions under the 1970 Fair Credit Reporting Act and subsequent amendments.

The Commission has held public hearings on the general topic of background checks that include credit and criminal histories, but it hasn’t made its prospective guidance available for public comment or sought a review from the White House office that examines new regulations. The U.S. Chamber of Commerce earlier this month wrote to Cass Sunstein, chief of the White House Office of Information and Regulatory Affairs, asking for such a review. Good idea.

The Commission’s heightened interest in wielding disparate impact over business hiring may have something to do with the pending departure of Democratic Commissioner Stuart J. Ishimaru. Once he leaves, Democrats will lose their majority on the panel, and the chance of issuing this kind of guidance will diminish considerably.

The only certainty is that such a decision would further complicate business hiring at a time when America’s millions of jobless need more potential employers. The harder government makes it to hire or fire someone, the fewer people will be hired.

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